The European financial services industry has called for global coordination of new benchmark rules as a slew of national regulators begin drawing up individual plans in the wake of the Libor-fixing scandal.

European Commission

Their comments came in response to a European Commission consultation on the composition, governance and supervision of benchmarks, one of several pieces of regulatory work on the subject.

The UK Treasury warned the Commission “to have full regard to the work ongoing in other international fora”, adding: “Significant inconsistencies across major global jurisdictions could likely result in regulatory arbitrage and fragmentation of global financial markets to the detriment of the EU economy.”

The UK Financial Services Authority, the Bank for International Settlements, the Financial Stability Board, the International Organization of Securities Commissions and the European Securities and Markets Authority have each launched their own benchmark initiatives.

The potpourri of reviews has raised concerns that new final rules may conflict or overlap, creating an additional cost for firms. The Association for Financial Markets in Europe said it “strongly” believed that “international and globally coordinated standards are needed”, while the Investment Management Association described coordination as “vital”.

Their comments come at a time when national regulators are struggling to agree and many institutions are looking to the International Organization of Securities Commissions to play a more prominent role in coordinating regulatory initiatives.

David Wright, Iosco secretary general, has already suggested that global mechanisms are required for dealing with disputes and friction.

However, PJ Di Giammarino, chief executive of financial services regulation think tank JWG Group, said they might be disappointed. He said: “As we have seen with other big-picture initiatives, it’s very difficult to go about operationalising a political solution without an internationally binding regulator that has the ability to get national regulators on the same page.”